25 Nov 2013
Flash: Iran deal and Oil shift leads morning FX moves - BMO Capital Markets
FXstreet.com (Barcelona) - Stephen Gallo, European Head of Currency Strategy at BMO Capital Markets notes that the morning session in London is largely summed up by the Iran ‘nuclear accord’ and the corresponding move in oil prices.
Key Quotes
"Monetary policy divergence bets were also apparent, but mainly in the EUR. GBP/NOK and NOK/SEK were ‘where the money was’."
"As for the oil price impact, the rally in CAD/NOK (i.e. CAD outperformance) for most of the morning emphasizes a theme mentioned last week, which was that the market was already quite short of the CAD heading into the October CPI data."
"Additionally, with a sizeable chunk of the ‘Iran premium’ now out of the price, NOK/SEK is better priced, in our opinion, relative to where we see the 12-month trend in that pair, which is still lower."
"The near-term failure of GBP/USD and AUD/USD to power higher/lower respectively this morning – along with a few other factors – suggests that those two themes are somewhat exhausted for the time being."
"The general bid/offer bias should, however, generally remain intact through the impending period of ‘year-end noise’."
Key Quotes
"Monetary policy divergence bets were also apparent, but mainly in the EUR. GBP/NOK and NOK/SEK were ‘where the money was’."
"As for the oil price impact, the rally in CAD/NOK (i.e. CAD outperformance) for most of the morning emphasizes a theme mentioned last week, which was that the market was already quite short of the CAD heading into the October CPI data."
"Additionally, with a sizeable chunk of the ‘Iran premium’ now out of the price, NOK/SEK is better priced, in our opinion, relative to where we see the 12-month trend in that pair, which is still lower."
"The near-term failure of GBP/USD and AUD/USD to power higher/lower respectively this morning – along with a few other factors – suggests that those two themes are somewhat exhausted for the time being."
"The general bid/offer bias should, however, generally remain intact through the impending period of ‘year-end noise’."